It was a while in the making, but since 2021, Breathing Space – also known as the Debt Respite Scheme – has been available in the UK. This Government-backed scheme is designed to help those struggling with debt by offering legal protection from creditor action, including enforcement action, additional interest, charges, and general contact, for up to 60 days.
To help you understand what Breathing Space actually is, how it works, and how you can apply for it, we’ve put together this all-you-need-to-know guide.
Whether you’re struggling with credit card or gambling debt and are looking for respite, or need time to consider your next steps – be that an Individual Voluntary Arrangement (IVA), Debt Management Plan (DMP) or Bankruptcy, MoneyPlus could help.
Breathing Space explained
The Breathing Space gives people 60 days to seek debt advice from an FCA regulated provider, during which time creditors are legally obliged to freeze interest, charges, collections and enforcement action. It covers almost all debts, even those to local and national Governments, such as council tax debt.
The measure will support people in managing short-term disruptions to their finances, and help them to get back in control of their situation. There are two different types of ‘Breathing Space’ on offer:
- Standard Breathing Space – available to any person with problem debt.
- Mental health crisis Breathing Space – available to those who have problem debt and who are receiving mental health crisis treatment from the NHS.
If you are considering applying for the Breathing Space Scheme, read the key points below. The should help you gain a better understanding of what the scheme is and whether or not you are likely to qualify:
- The Breathing Space Scheme lasts for up to 60 days, and it can only be used once every 12 months (however, there is no limit for those who are experiencing a mental health crisis – more on this below).
- Breathing Space is not a payment holiday; you must continue to pay your contracted payments and bills whilst the scheme is in place, otherwise it could be cancelled.
- The chosen debt advice provider must make an entry on the ‘Breathing Space Register’. The register isn’t available for public viewing (like an Insolvency Register) – only creditors and FCA regulated companies will be able to view it.
- Between day 25 and 35, you must review your financial situation with your chosen debt advice provider. Breathing Space can only be extended to 60 days if you contact your provider to make a review.
- Debt advice providers cannot (and should not) charge a fee for the advice they give you, or setting up the Breathing Space Scheme for you. If you end up choosing a more permanent solution with the provider, any normal fees will apply once the solution commences.
How to apply for Breathing Space
In order to access the scheme, you’ll need to get in touch with an FCA regulated advice provider, such as MoneyPlus Advice, and let them know about your situation. They will discuss your options, and let you know if the Breathing Space Scheme is suitable for you. If it is, they will set it up there and then.
Additional protection for those with mental health conditions
As mentioned above, for those experiencing a mental health crisis being treated by the NHS, the Breathing Space Scheme is available to them for the full duration of their crisis treatment, plus a further 30 days. There will be no limit to how frequently the scheme can be accessed through this route, so long as the person is under the care of an NHS crisis team.
Does Breathing Space stop bailiffs?
Put simply, yes. Breathing Space can temporarily stop bailiffs from taking action against you. When you enter a Breathing Space, creditors are legally required to pause most types of enforcement action. This includes stopping any visits from bailiffs and suspending the collection of debts covered by the scheme. As discussed above, standard Breathing Space lasts for up to 60 days, providing individuals with a crucial period to seek debt advice and develop a plan to manage their financial situation without the immediate pressure of enforcement actions.
However, it’s important to note that while Breathing Space can provide temporary relief, it is just that – temporary. It does not write-off the debt, and you will need to work towards a more permanent solution during this period.
Can Breathing Space stop eviction?
Yes – in the same way as Breathing Space can offer temporary protection against bailiffs, it can also temporarily prevent eviction. However, it does not completely stop the process. If you are facing eviction due to rent areas, entering Breathing Space means your landlord cannot take steps to evict you for those arrears during the 60-day period. That being said, if eviction proceedings were already underway before Breathing Space started, these can still continue.
It’s also important to note that Breathing Space does not cover other grounds for eviction. For example, if you are being evicted due to antisocial behaviour or damage to the property, the eviction can still go ahead.
Does Breathing Space affect credit rating?
No. Breathing Space itself will not directly affect your credit rating. However, it’s important to understand that while the scheme protects you from enforcement actions and additional interest or charges during its duration, it does not erase the fact that you are in debt.
This is to say, any missed payments or defaults that occurred before entering Breathing Space will still be reflected in your credit history. Put bluntly, if you are in a position where applying for the Breathing Space Scheme has become necessary, the chances are your credit score has already been negatively impacted by your history of debt.
Apply for Breathing Space with MoneyPlus Advice
We’re an FCA regulated debt solutions provider, and we’ve been helping thousands of customers get their finances back on track for over 20 years.
If you think that Breathing Space could be right for you, you can get in touch with our expert team of advisors today, and we’ll be happy to discuss your options with you.
We’ll walk you through your current financial situation to understand your circumstances, and provide you with expert advice and guidance on all available options to help alleviate your debts. If Breathing Space is right for you, we’ll set it up there and then.
We’ll then contact you between day 25 and 35 to complete a financial review, which could mean that your Breathing Space is extended to 60 days, or we can set you up with a longer term solution to help with your debts.
